Financial advisory and investment banking company Duff & Phelps Corp. (DUF: Quote) said Sunday that it has agreed to be acquired by a consortium that includes private equity giant Carlyle Group LP (CG: Quote) in a deal valued at $665.5 million.
Under the terms of the deal, the consortium comprising of Carlyle, Stone Point Capital LLC, Pictet & Cie, and Edmond de Rothschild Group will acquire Duff & Phelps for $15.55 per share in cash. The offer price represents a 19.2 percent premium to the company’s closing stock price of $13.05 per share on Friday, December 28.
The transaction is expected to close in the first half of 2013, subject to customary closing conditions – including the receipt of stockholder and regulatory approvals.
Duff & Phelps provides advises clients in the areas of valuation, transactions, financial restructuring, alternative assets, disputes and taxation. It employs more than 1,000 people and has offices in North America, Europe and Asia.
Olivier Sarkozy, Managing Director and head of Carlyle’s Global Financial Services group, said, “Regulatory demands, implementation of new accounting policies and requirements for increased corporate disclosure and third party validation provide significant growth opportunities for Duff & Phelps core products and services. We will harness Carlyle’s and Stone Point’s global networks while leveraging Duff & Phelps preeminent brand to foster growth in new geographies.”
Sarkozy added, “Additionally, we believe the involvement of Pictet and Edmond de Rothschild Group will support the Company’s initiatives to enhance its international presence and expand its Limited Partner client base.”
Duff & Phelps said it will actively solicit alternative merger offers from third parties during the “go-shop” period that starts immediately and ends on February 8.
The merger deal provides for a break-up fee of about $6.65 million if the company terminates the merger agreement with the consortium prior to March 8, 2013, and accepts a superior proposal that first arose during the go-shop period.
Duff & Phelps said that all members of its senior management team have agreed to remain employed by the company and also invest in its equity following the closing of the transaction. They have also agreed to participate on similar terms in any other acquisition proposal that may be made for the company.
The pro forma board of directors of Duff & Phelps will comprise nine members – including two representatives each from the management team, Carlyle Group and Stone Point Capital, in addition to three independent directors. No single member of the consortium will own more than 35 percent of the pro forma company.
Duff & Phelps’ board of directors has recommended that stockholders vote in favor of the transaction at a special meeting that will be called to approve the deal. Stockholders beneficially owning an aggregate of about 10 percent of the outstanding shares of the company have already agreed to vote their shares in favor of the transaction.
Under the deal, Duff & Phelps can continue to pay dividends if declared by it in the normal course prior to closing of the transaction.
DUF closed Friday’s trading at $13.05, up $0.24 or 1.87 percent on a volume of 165,600 shares.
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by RTT Staff Writer
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